Letter - direct payments to farmers by Farming Minister George Eustice MP

Today, the Government is introducing the Direct Payments to Farmers (Legislative Continuity) Bill. This Bill will provide continuity and stability to farmers as the UK leaves the EU and ensure that they continue to receive direct payment support for the 2020 scheme year. The Bill is not intended to make provision for agriculture policy change.

The Agriculture Bill

The Government will bring forward an Agriculture Bill this month, as announced in the Queen’s Speech on 19 December 2019, to provide the future framework for future farming policy in England from 2021. It will replace the restrictive rules of the EU’s Common Agricultural Policy (CAP), freeing farmers to seize the opportunities offered by Brexit. It will introduce ambitious new land management schemes, based on the principle of “public money for public goods”, which will allow us to reward farmers and land managers who protect our environment, improve animal welfare and produce high quality food in a more sustainable way. Farmers and land managers will be supported over a seven-year agricultural transition period, giving them time to plan and adapt to the new approach.

An additional operability Bill

The Direct Payments to Farmers (Legislative Continuity) Bill is focussed on maintaining the status quo in the meantime, making sure that farmers continue to receive Direct Payments for the 2020 scheme year.

The Withdrawal Agreement will stop the CAP Direct Payments legislation from applying in the UK for the 2020 scheme year. This was intended so the UK would not have to pay into the EU’s next budget cycle, which funds 2020 Direct Payments. This Bill will ensure continuity of payments while we negotiate a new comprehensive trade partnership with the EU.

The Chancellor of the Exchequer announced on 30 December funding for Direct Payments for 2020 that matches the total funding for Direct Payments available for 2019. This has enabled the Government and Devolved Administrations to commit to paying farmers under the Basic Payment Scheme (BPS) for 2020. Thereafter, we have successfully provided more certainty to farmers by committing to match the current overall budget available to farmers in every year of this Parliament.

Reapplying retained EU CAP Direct Payments law

The Bill will provide a technical fix by bringing EU direct payments legislation into domestic law and will enable the Government and Devolved Administrations to continue to provide payment to farmers for 2020. Its scope is narrow and is limited to Direct Payments for the 2020 scheme year.

Accommodating the “Bew review” uplift

It also includes a provision (clause 5) to allow us to implement a previous Government funding announcement, within the framework of the direct payments scheme. In September 2019 the Government accepted the recommendations of the Bew Review concerning the allocation of farm support funding in the UK. It agreed that a greater share of the so-called ‘convergence funding’, an uplift of the financial ceiling for Direct Payments which was given by the EU to the UK, should for the period 2020-22 be allocated to Scotland and Wales. It also agreed that the 2020-22 allocations for England and Northern Ireland should be maintained, resulting in an overall funding uplift of £56.6m for the UK. There is provision in this Bill to increase the total maximum amount of direct payments for 2020 in order to accommodate this funding uplift.

Agriculture is a devolved matter. The Devolved Administrations have agreed that the UK Government should legislate for the whole of the UK. The Bill will enable devolved governments to fulfil their commitments to continue to pay farmers for 2020 after EU-exit.